Some Wisconsin school administrators collect both pension, salary

Districts defend practice, but new law limits it

Jan. 31, 2014

Written by

Gannett Wisconsin Media Investigative Team

Special Report: Superintendent perks

In a four-part series that began Jan. 26, the Gannett Wisconsin Media Investigative Team examines the salaries and benefits of public school district administrators in the state. Jan. 25: Administrator benefits tied to limited market Jan. 26: CESA administrators fill in school district gaps, garner perks Today: Some administrators cross state lines to collect pension, salary Tomorrow: One school administrator finds a unique way to cut expenses

Pensions 101

Most public employees in Wisconsin receive retirement benefits through the Wisconsin Retirement System, a public pension fund available to state, municipal and school district employees. Milwaukee and Milwaukee County employees have separate systems. WRS employers typically contributed the equivalent of 10 percent of an employee’s annual salary to the fund until the passage of Act 10 in 2011, when employees began making half the contribution themselves. Employees retiring from WRS-eligible positions can receive pensions as annuities — ongoing monthly payouts — or lump sums that are paid out at separation, retirement or death. As of December 2012, the latest year for which data available, the system had 256,833 active employees, 173,655 annuitants and 159,973 inactive employees — those who are not currently in a WRS-eligible position but previously earned benefits payable at retirement. The State of Wisconsin Investment Board manages the investment of pension funds, while the Department of Employee Trust Funds administers the system, collecting and disbursing money, and establishing procedures. With $93.6 billion in assets, WRS is the only public pension fund in the country that is fully funded, meaning it has enough money on hand to fulfill its pension obligations. A 2012 annual report said the average WRS pensioner retires at age 59.5 and receives an annual pension of $23,673. General employees — a group that includes all but police, fire, teachers and elected officials — left with an average of 22 years of service. General employees, teachers and elected officials can get pensions as early as 55 years old, but the benefit is reduced for anyone under 65. Source: Department of Employee Trust Funds, State of Wisconsin Investment Board

How we did it

To gauge salaries and benefits of public school district administrators in the state, the Gannett Wisconsin Media Investigative Team used the Public Records Law to obtain contracts for about one-fourth of the state’s 425 school administrators, examining 110 contracts in all. The group included the 12 regional Cooperative Educational Service Agencies and 98 school district administrators, including those from the state’s 10 largest districts and districts of all sizes throughout central and eastern Wisconsin. Contract details including salary, retirement benefits, vacation and sick allowances, health insurance and auto allowances were compiled into a database to allow comparison among districts. The searchable database is available online with this story, along with copies of each contract. The contracts revealed numerous administrators who do not receive employer contributions to the Wisconsin Retirement System or health insurance, often indicators of an employee who has retired and returned to work. Additional pensioners working as school administrators were identified by searching prior media reports and examining state Department of Public Instruction records to determine which administrators were at retirement age when they started their most recent job. Administrators were then contacted to confirm whether they were taking a pension while working in their current positions.

About the I-TeamThe Gannett Wisconsin Media Investigative Team, headquartered at Post-Crescent Media, reports on issues that are of statewide importance. I-Team reports typically publish on weekends on websites and in daily newspapers of all 10 Gannett Wisconsin markets: Appleton, Fond du Lac, Green Bay, Manitowoc, Marshfield, Oshkosh, Sheboygan, Stevens Point, Wausau and Wisconsin Rapids. Full-time I-Team members include editor John Ferak, based in Appleton, and reporters Eric Litke, in Sheboygan, and Kathleen Foody, based in Wausau. Send questions or story tips to Ferak by email: jferak@gannett.com; phone: 920-993-7115; or Twitter @johnferak.

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Unhappy with so-called “double dipping,” Wisconsin legislators last year limited public retirees’ ability to return to work while drawing a pension.

However, no laws restrict or penalize pensioners from moving between states, a practice that has proven lucrative for several school district administrators in Wisconsin.

Kathleen Williams of Wausau and Attila Weninger of Stevens Point — both of whom take in more than $335,000 between their pension and salary — are among at least six current superintendents drawing pensions in other states and salaries in Wisconsin, according to employment contracts, state records and media reports reviewed by the Gannett Wisconsin Media Investigative Team. At least nine more district administrators are drawing pensions in Wisconsin while continuing to work here or elsewhere.

“Real retirement is much more fluid than it used to be,” said Stan Mack II, district administrator in the Oshkosh Area School District since 2010. Mack this year has a salary of $160,000 in addition to a Minnesota pension of about $98,000, he said. His previous district in Minnesota also covers his health insurance until 2015, when he turns 65.

Administrators defend their dual income streams as legitimately earned and consistent with practices in the private sector, noting pensions generally include money they contributed themselves. And school boards say hiring retirees to lead their districts guarantees an experienced hand and limited benefit costs.

Williams tops the list of active pensioners at $341,037 in total pay for the 2013-14 school year. That includes a salary of $157,994 from Wausau and an Illinois pension of $183,043, according to a database maintained by the Better Government Association, a nonpartisan group in Illinois that advocates for government transparency with a focus on public spending. Weninger is right behind with a salary of $155,500 from Stevens Point and an Illinois pension of $180,302.

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Other examples identified by Gannett Wisconsin Media:

• Don Childs, interim administrator in the Antigo Unified School District in Langlade County, draws pensions from two states, having retired from districts in Illinois in 1994 and Wisconsin in 2004. This year he has a $120,000 salary, an Illinois pension of $100,788 and a Wisconsin pension of about $12,000, he said.

• Michael Gaunt of the Marion School District in Waupaca County retired in Michigan in 2010 before taking his current post, but he declined to reveal his pension amount, which is not a public record in Michigan.

• George Steffen of the Trevor-Wilmot School District in Kenosha County draws a $120,400 Illinois pension in addition to a salary of $120,226.

Nationwide, about 10 percent of district administrators reported having previously retired, according to a 2013 survey by the American Association of School Administrators. Barry Forbes, associate executive director and staff counsel for the Wisconsin Association of School Boards, said he doesn’t believe movement between states has changed in frequency in recent years.

Todd Berry, president of the Wisconsin Taxpayers Alliance, said the pensions are a contractual right and should be allowed, even if the dual incomes “might not pass the smell test for some people.”

Hiring for experience

Wausau School Board President Michelle Schaefer said Williams was a good hire for her district. The administrator was hired in 2010 after a 35-year career in Illinois.

“Given her experience and what our parameters were for salary, I don’t know if she wasn’t retired if we would have been able to afford somebody with her qualifications,” Schaefer said. “She earns her salary here, just as she qualified and earned her pension there (in Illinois).”

Williams is on medical leave and was unable to be interviewed for this story.

Weninger said he left his Illinois district in 2010 intending to retire, but a recruiter alerted him to the Stevens Point job and he felt he could make a difference there. He said he doesn’t look at his dual incomes as double dipping.

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“We live in a country of opportunity,” Weninger said. “There’s no law or ethical prohibition against moving from one state to another. ... If there are districts that want to hire me or other superintendents who have experience, whether they retire from another state or district or not, they have the right to do that.”

Administrators say public-sector retirees should be treated no different than military or private-sector workers who retire and go on to work elsewhere.

“People can retire from business or retire from some other industry, and if they retire and choose to do something else, are we critical of that population, or are we just critical of public employees?” asked Bill Harbron, who retired from the Northern Ozaukee School District in July 2011. He draws a $29,000 pension from Wisconsin while working full time as a district administrator in Ohio.

Various paths back to work

In addition to the retirees from other states, at least eight current Wisconsin administrators are drawing a pension from the Wisconsin Retirement System, which covers nearly all public employees in the state.

Charles Pursell, administrator in the Lodi School District north of Madison, has been drawing a pension since retiring in 2001, but he has continued working in public education. This year he works a 90 percent position at a salary of $107,000 while drawing a pension of around $48,000. He said the two sources of pay are not related.

“My pension, what I’m earning from it, is one issue. Whether I’m capable or not capable of doing this job, that’s for the community and the board to decide,” Pursell said.

Other administrators working while drawing a Wisconsin pension include those in the Almond-Bancroft (Portage County), Campbellsport (Fond du Lac), Granton (Clark), Oakfield (Fond du Lac), Reedsville (Manitowoc) and Stockbridge (Calumet) districts. All those administrators fill a position that is two-thirds time or less except for Campbellsport’s Paul Amundson, who works full-time.

Forbes, from the school board association, said part-time administrators have become more common in recent years as districts deal with cuts to state revenue. Retired administrators often are the only people willing to take a reduced-time position, he said.

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Childs, from Antigo, has filled an array of interim roles since retiring for the second time in 2004, including stops in the Howard-Suamico and Waupun districts. Childs said his retired status saves the district money because they don’t contribute toward his pension or pay for his health insurance.

But Gannett Wisconsin Media found administrators often leverage cost savings from benefits into other types of compensation.

A review of 98 administrator contracts from around Wisconsin — about one-fourth of the state’s 425 districts — showed 15 administrators did not receive health insurance benefits through their district. Six of those administrators received annuities, deferred compensation or raises that were listed as being in lieu of insurance.

New limits on rehiring

Restrictions passed with the latest state budget say public-sector employees retiring under the Wisconsin Retirement System cannot return to another state pension-eligible position for 75 days.

Retirees can collect a WRS annuity or lump sum while working only if their position is two-thirds or less, meaning they could work about 27 hours a week. There are no limitations on finding work in the private sector or collecting retirement pay not connected to WRS.

Before the new law, which took effect in July, retirees had to wait 30 days and could work full time while drawing a pension. The legislation was passed as part of Gov. Scott Walker’s budget but was largely based on a previous bill introduced by state Rep. Duey Stroebel, a Republican from Saukville.

“It’ll help to preclude just the pseudo-retirements where they’re only retiring because it’s a numbers game and they’re intending to go back to work,” Stroebel said. “Our system is designed to support people in retirement, and if they’re not really retired, that’s an abuse of the system.”

Wisconsin school districts have routinely hired retirees to this point, according to a December 2012 report from the state’s nonpartisan Legislative Audit Bureau. Districts reported employing 1,681 retired employees receiving pension payouts from January 2011 to March 2012, though the vast majority returned to part-time roles. That was based on survey responses from 348 of the state’s 425 school districts.

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“You really did have a person reaching into the public treasury in one organization with two hands,” Berry, the taxpayer advocate, said of retirees who returned to their prior employer. “The taxpayers had paid the retirement and then they were paying the salary as well.”

A Wisconsin superintendent would receive an annual pension of about $45,000 if retiring this year at age 65 with 22 years of experience (the average for general WRS annuitants) and an ending salary of $125,000 (the 2012-13 average for state superintendents), according to an online benefits calculator from the Wisconsin Department of Employee Trust Funds, which administers WRS. That pension would rise to $86,000 — reaching the maximum of 70 percent of final earnings — if the administrator had worked in state public schools since leaving college around age 22.

Employee Trust Funds spokesman Mark Lamkins said the agency doesn’t keep data on the average pension for Wisconsin school superintendents. Administrators and most other employees can retire as early as age 55, though benefits are reduced if they retire before 65.

There is no law limiting public-sector retirees in Minnesota, but Illinois and Michigan both limit the extent to which a pensioner can return to work in the public sector. William Mayes, executive director of the Michigan Association of School Administrators, said the Michigan law — which took effect years ago — exacerbated what was already a “critical shortage of really good administrators.”

Mack, from Oshkosh, said the new Wisconsin law is “very short-sighted” and could have serious consequences in an already limited superintendent market.

“What I think is most harmful is the restriction on very talented, bright Wisconsin administrators being prohibited from returning to work in another location that needs the expertise,” Mack said. “I worry about that being a dumbing down of the profession.”